By AFP
December 11, 2025
Taiwan makes more than half of the world's chips, and nearly all of the most advanced ones - Copyright AFP I-HWA CHENG
Taiwan plans to keep making the “most advanced” chips on home soil and remain “indispensable” to the global semiconductor industry, the deputy foreign minister told AFP, despite intense Chinese military pressure.
The democratic island makes more than half of the world’s chips, and nearly all of the most advanced ones, that power everything from smartphones to AI data centres.
Its dominance of the industry has long been seen as a “silicon shield” protecting it from an invasion or blockade by China — which claims the island is part of its territory — and an incentive for the United States to defend it.
But the threat of a Chinese attack has fuelled concerns about potential disruptions to global supply chains and has increased pressure for more chip production beyond Taiwan’s shores.
“We will try to maintain the most advanced technology in Taiwan, and to be sure that Taiwan continues to play an indispensable role” in the semiconductor ecosystem, Deputy Foreign Minister Francois Chih-chung Wu told AFP in an interview Wednesday.
“I think it’s the same logic for every country, even countries not under such a very complicated geopolitical situation.”
China has ramped up military pressure on Taiwan in recent years, deploying on an almost daily basis fighter jets and warships around the island.
Taiwan has responded by increasing defence spending to upgrade its military equipment and improve its ability to wage asymmetric warfare.
– ‘Core interest’ –
The island does not have enough land, water or energy to accommodate the fabrication plants, or fabs, needed to meet soaring demand for chips, “so step by step we enlarge our investment in the world, but still linking with Taiwan”, said Wu, who was previously the representative to France.
Taiwan’s TSMC, the world’s largest chipmaker, has already invested in fabs in the United States, Japan and Germany.
And earlier this year the firm pledged to spend an additional US$100 billion on US chip plants, as President Donald Trump threatened to impose tariffs on overseas-made semiconductors.
However, replicating TSMC’s factories in the United States is full of challenges, said Wu, citing Taiwan’s “very special culture to make the semiconductors very well”.
The best way to reduce risks to the chip industry was not to move fabs abroad but to “prevent the war”, Wu said.
US Secretary of Commerce Howard Lutnick said recently he had proposed to Taiwan a 50-50 split in chip production, an idea that Taipei rejected.
While Washington is Taiwan’s most important security backer, some of Trump’s comments about the island and flip-flopping on Ukraine have raised doubts over his willingness to defend it.
Wu, however, expressed confidence that the United States, as well as Europe, would respond to a Chinese attack on Taiwan in order to protect their “national interest” in the region.
“It just happens that your interest and Taiwan’s interest we share together,” Wu said.
Those interests, he said, included the semiconductor industry but also peace, and freedom of navigation in the Taiwan Strait, which is a key international shipping route.
“I think Donald Trump understands better and better, day by day, the strategic importance of Taiwan… and will defend American interests in his own way,” Wu said.
“We are the core interest of China, but we are also a core interest of the US.”
AI’s $400 bn problem: Are chips getting old too fast?
By AFP
December 10, 2025
Jensen Huang is CEO of Nvidia, the leader among chip makers that are releasing new and more powerful processors much faster than before
By AFP
December 10, 2025
Jensen Huang is CEO of Nvidia, the leader among chip makers that are releasing new and more powerful processors much faster than before
- Copyright GETTY IMAGES NORTH AMERICA/AFP Andrew Harnik
Thomas URBAIN
In pursuit of the AI dream, the tech industry this year has plunked down about $400 billion on specialized chips and data centers, but questions are mounting about the wisdom of such unprecedented levels of investment.
At the heart of the doubts: overly optimistic estimates about how long these specialized chips will last before becoming obsolete.
With persistent worries of an AI bubble and so much of the US economy now riding on the boom in artificial intelligence, analysts warn that the wake-up call could be brutal and costly.
“Fraud” is how renowned investor Michael Burry, made famous by the movie “The Big Short,” described the situation on X in early November.
Before the AI wave unleashed by ChatGPT, cloud computing giants typically assumed that their chips and servers would last about six years.
But Mihir Kshirsagar of Princeton University’s Center for Information Technology Policy says the “combination of wear and tear along with technological obsolescence makes the six-year assumption hard to sustain.”
One problem: chip makers — with Nvidia the unquestioned leader — are releasing new, more powerful processors much faster than before.
Less than a year after launching its flagship Blackwell chip, Nvidia announced that Rubin would arrive in 2026 with performance 7.5 times greater.
At this pace, chips lose 85 to 90 percent of their market value within three to four years, warned Gil Luria of financial advisory firm D.A. Davidson.
Nvidia CEO Jensen Huang made the point himself in March, explaining that when Blackwell was released, nobody wanted the previous generation of chip anymore.
“There are circumstances where Hopper is fine,” he added, referring to the older chip. “Not many.”
AI processors are also failing more often than in the past, Luria noted.
“They run so hot that sometimes the equipment just burns out,” he said.
A recent Meta study on its Llama AI model found an annual failure rate of 9 percent.
– Profit risk –
For Kshirsagar and Burry alike, the realistic lifespan of these AI chips is just two or three years.
Nvidia pushed back in an unusual November statement, defending the industry’s four-to-six-year estimate as based on real-world evidence and usage trends.
But Kshirsagar believes these optimistic assumptions mean the AI boom rests on “artificially low” costs — and consequences are inevitable.
If companies were forced to shorten their depreciation timelines, “it would immediately impact the bottom line” and slash profits, warned Jon Peddie of Jon Peddie Research.
“This is where companies get in trouble with creative bookkeeping.”
The fallout could ripple through an economy increasingly dependent on AI, analysts warn.
Luria isn’t worried about giants like Amazon, Google, or Microsoft, which have diverse revenue streams. His concern focuses on AI specialists like Oracle and CoreWeave.
Both companies are already heavily indebted while racing to buy more chips to compete for cloud customers.
Building data centers requires raising significant capital, Luria points out.
“If they look like they’re a lot less profitable” because equipment must be replaced more frequently, “it will become more expensive for them to raise the capital.”
The situation is especially precarious because some loans use the chips themselves as collateral.
Some companies hope to soften the blow by reselling older chips or using them for less demanding tasks than cutting-edge AI.
A chip from 2023, “if economically viable, can be used for second-tier problems and as a backup,” Peddie said.
Thomas URBAIN
In pursuit of the AI dream, the tech industry this year has plunked down about $400 billion on specialized chips and data centers, but questions are mounting about the wisdom of such unprecedented levels of investment.
At the heart of the doubts: overly optimistic estimates about how long these specialized chips will last before becoming obsolete.
With persistent worries of an AI bubble and so much of the US economy now riding on the boom in artificial intelligence, analysts warn that the wake-up call could be brutal and costly.
“Fraud” is how renowned investor Michael Burry, made famous by the movie “The Big Short,” described the situation on X in early November.
Before the AI wave unleashed by ChatGPT, cloud computing giants typically assumed that their chips and servers would last about six years.
But Mihir Kshirsagar of Princeton University’s Center for Information Technology Policy says the “combination of wear and tear along with technological obsolescence makes the six-year assumption hard to sustain.”
One problem: chip makers — with Nvidia the unquestioned leader — are releasing new, more powerful processors much faster than before.
Less than a year after launching its flagship Blackwell chip, Nvidia announced that Rubin would arrive in 2026 with performance 7.5 times greater.
At this pace, chips lose 85 to 90 percent of their market value within three to four years, warned Gil Luria of financial advisory firm D.A. Davidson.
Nvidia CEO Jensen Huang made the point himself in March, explaining that when Blackwell was released, nobody wanted the previous generation of chip anymore.
“There are circumstances where Hopper is fine,” he added, referring to the older chip. “Not many.”
AI processors are also failing more often than in the past, Luria noted.
“They run so hot that sometimes the equipment just burns out,” he said.
A recent Meta study on its Llama AI model found an annual failure rate of 9 percent.
– Profit risk –
For Kshirsagar and Burry alike, the realistic lifespan of these AI chips is just two or three years.
Nvidia pushed back in an unusual November statement, defending the industry’s four-to-six-year estimate as based on real-world evidence and usage trends.
But Kshirsagar believes these optimistic assumptions mean the AI boom rests on “artificially low” costs — and consequences are inevitable.
If companies were forced to shorten their depreciation timelines, “it would immediately impact the bottom line” and slash profits, warned Jon Peddie of Jon Peddie Research.
“This is where companies get in trouble with creative bookkeeping.”
The fallout could ripple through an economy increasingly dependent on AI, analysts warn.
Luria isn’t worried about giants like Amazon, Google, or Microsoft, which have diverse revenue streams. His concern focuses on AI specialists like Oracle and CoreWeave.
Both companies are already heavily indebted while racing to buy more chips to compete for cloud customers.
Building data centers requires raising significant capital, Luria points out.
“If they look like they’re a lot less profitable” because equipment must be replaced more frequently, “it will become more expensive for them to raise the capital.”
The situation is especially precarious because some loans use the chips themselves as collateral.
Some companies hope to soften the blow by reselling older chips or using them for less demanding tasks than cutting-edge AI.
A chip from 2023, “if economically viable, can be used for second-tier problems and as a backup,” Peddie said.
Oracle shares dive as revenue misses forecasts
By AFP
December 10, 2025
Oracle founder and chief technology officer Larry Ellison says the business cloud computing titan is going to work with all AI chip makers, not just Nvidia, as it invests in the technology - Copyright GETTY IMAGES NORTH AMERICA/AFP JUSTIN SULLIVAN
Shares in business computing giant Oracle fell more than 10 percent on Wednesday on word its revenue missed heady expectations, dampening artificial intelligence euphoria in the market.
The slide in after-market trades came despite Texas-based Oracle reporting that net income in the recently-ended quarter nearly doubled to $6.1 billion in revenue, up 14 percent from the same period a year earlier to $16.05 billion.
Oracle’s cloud and business computing unit accounted for $8 billion of that revenue, an increase of 34 percent from the same quarter in 2024, according to the earnings report.
“AI training and selling AI models are very big businesses,” Oracle chief executive Mike Sicilia said in the release.
“We think there is an even larger opportunity — embedding AI in a variety of different products.”
But investors are wary of the massive investments tech companies are making in artificial intelligence models and infrastructure, wondering how and when they will pay off.
Oracle has taken on billions of dollars in debt to pay for AI infrastruture and is reported to be considering borrowing even more.
The company has also announced it is putting significant resources into partnerships with AI chip makers and model builders, such as OpenAI and Meta.
“We are now committed to a policy of chip neutrality where we work closely with all our CPU and GPU suppliers,” Oracle founder and chief technology officer Larry Ellison said in the earnings release.
“There are going to be a lot of changes in AI technology over the next few years, and we must remain agile in response to those changes.”
Oracle shares were down some 10.7 percent to $199.50 in after-market trades that followed release of the earnings figures.
By AFP
December 10, 2025
Oracle founder and chief technology officer Larry Ellison says the business cloud computing titan is going to work with all AI chip makers, not just Nvidia, as it invests in the technology - Copyright GETTY IMAGES NORTH AMERICA/AFP JUSTIN SULLIVAN
Shares in business computing giant Oracle fell more than 10 percent on Wednesday on word its revenue missed heady expectations, dampening artificial intelligence euphoria in the market.
The slide in after-market trades came despite Texas-based Oracle reporting that net income in the recently-ended quarter nearly doubled to $6.1 billion in revenue, up 14 percent from the same period a year earlier to $16.05 billion.
Oracle’s cloud and business computing unit accounted for $8 billion of that revenue, an increase of 34 percent from the same quarter in 2024, according to the earnings report.
“AI training and selling AI models are very big businesses,” Oracle chief executive Mike Sicilia said in the release.
“We think there is an even larger opportunity — embedding AI in a variety of different products.”
But investors are wary of the massive investments tech companies are making in artificial intelligence models and infrastructure, wondering how and when they will pay off.
Oracle has taken on billions of dollars in debt to pay for AI infrastruture and is reported to be considering borrowing even more.
The company has also announced it is putting significant resources into partnerships with AI chip makers and model builders, such as OpenAI and Meta.
“We are now committed to a policy of chip neutrality where we work closely with all our CPU and GPU suppliers,” Oracle founder and chief technology officer Larry Ellison said in the earnings release.
“There are going to be a lot of changes in AI technology over the next few years, and we must remain agile in response to those changes.”
Oracle shares were down some 10.7 percent to $199.50 in after-market trades that followed release of the earnings figures.
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